The Federal Inland Revenue Service (FIRS) has introduced a centralized tax remittance system to simplify payments for the 36 states of the federation, aiming to enhance tax compliance and revenue generation.
This announcement was made by the Executive Chairman of FIRS, Dr. Zacch Adedeji, during a recent workshop on improving tax compliance and revenue organised for state Accountant Generals in Abuja.
Dr. Adedeji highlighted that the new system streamlines the remittance process, allowing state Accountant Generals to handle payments on behalf of government agencies. This centralised system has been instrumental in speeding up the remittance of key taxes such as value added tax (VAT), withholding tax (WHT), and stamp duties.
“The federal government has made efforts to simplify the tax remittance process, particularly through the centralised payment system, where accountant generals handle payments on behalf of government agencies. This has ensured swift remittance of taxes like VAT, WHT, and Stamp Duties,” Dr. Adedeji explained.
In addition to the new remittance system, the FIRS reduced WHT rates to focus on taxing profits rather than revenue. This move, according to Dr. Adedeji, is intended to alleviate the tax burden on businesses and citizens while encouraging greater tax compliance.
“We believe that although this may reduce immediate tax collection, with enhanced compliance and collaboration, we can expand the tax base and make up the difference,” he said.
Dr. Adedeji further noted the crucial role of Accountant Generals in ensuring proper tax management.
“Accountant Generals are responsible for ensuring that VAT is charged and remitted, stamp duties are paid on contracts, and that withholding tax elements in contracts are properly withheld and remitted.”
The centralised tax remittance system is expected to improve efficiency in tax collection across states, providing a more streamlined process for managing government revenue.
